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U.S. to impose punitive duties on Chinese tires

WASHINGTON, D.C. – On July 14, 2015, the United States International Trade Commission (USITC) arrived at the conclusion in a final ruling that a U.S. industry is materially injured by reason of imports of certain passenger vehicle and light truck tires from China, which were deemed to be subsidized and sold in the United States at less than fair value, according to a news release from USITC.

As a result of the USITC’s affirmative determination with 3 to 3 votes, anti-dumping and countervailing duties will be imposed on certain passenger vehicle and light truck tires imported from China by the U.S. Commerce Department.

This decision was based on two alleged facts. The first is that the Chinese tires have been sold in the United States at dumping margins ranging from 14.35 percent to 87.99 percent. The other is that producers and exporters of these Chinese products received countervailable subsidies ranging from 20.73 percent to 100.77 percent.

China’s Ministry of Commerce (MOFCOM) has voiced out strong opposition to Washington for its unfair and discriminative methods in the trade remedy investigation, which jeopardizes the interests of Chinese enterprises concerned and breaches the rules of the World Trade Organization (WTO) and U.S. domestic laws.

“This affirmative injury finding of USITC contradicts the reality that the tire industry in the United States is currently in good operation and is intentionally utilized to impose the anti-dumping and countervailing duties on tires from China,” said an official from the Trade Remedy Investigation Bureau of MOFCOM. Besides, China has also repeatedly urged the U.S. to strictly comply with international trade rules, prudently use trade remedy measures and adopt responsible attitudes and actions to maintain a free, open and just international trade environment.

Experts commented that the anti-dumping and anti-subsidy investigation into Chinese tires last July was initiated at the request of United Steelworkers, a U.S. labor union, rather than the companies competing with Chinese firms, which was very unusual.

Tyler Moran and Gary Clyde Hufbauer, trade experts at the Peterson Institute for International Economics, said in a recent article that the sole petitioner seeking trade relief is the United Steelworkers union without the presence of tire firms.

They argued that unlike the case in 2009 when market disruption was claimed, the current scenario of injury was much lessened and U.S. producers were much stronger today than they were in 2012 under the condition that the “market disruption” safeguard measures expired, noting that U.S. consumers will suffer if the punitive duties are imposed.

Hufbauer estimated the total cost to American consumers from higher prices resulting from safeguard tariffs on Chinese tires was around $1.1 billion in 2011 as a result of the punitive duties on imports of Chinese passenger and light truck tires between 2009 and 2012.

The experts concluded, “As always, the Commissioners on the USITC face political pressure to make an affirmative injury finding. In this case, the economic facts argue otherwise.”

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